European regulators and legislators have once again failed to reach an agreement on key legislation designed to overhaul OTC derivatives markets.
A key sticking point for completing the high level text of the European market infrastructure directive (EMIR) remains the role that the European Securities and Markets Authority (ESMA) would have in resolving disputes that may arise between national regulators in terms of central counterparty (CCP) authorisation.
ESMA is the region’s securities watchdog that will also be responsible for drafting the technical details for EMIR. The deadline for technical standards is the end of June 2012 but many industry participants have doubted whether this deadline will be met, given the holdup in the trialogue debates.
CCP authorisation has plagued trialogue meetings between the European Parliament, the Council of the European Union and the European Commission since December last year. Michel Barnier, the European commissioner for internal market and services had said last week that he was confident today's meeting would be the last and anticipated the finalisation of the high level text by Easter.
During trialogue discussions, the three bodies are required to reconcile their separate versions of the proposed legislation.
A follow-up meeting has not yet been set but it is anticipated a new date will be finalised next week.
EMIR is Europe’s response to G-20 demands to reform OTC derivatives market following the financial crisis in 2008. It will seek to standards OTC derivatives instruments where possible so that they can be traded on exchange and centrally cleared. The new rules also include greater transparency on OTC derivatives exposures via specially created data repositories.